U.S. energy giant
) reported weak first quarter results on falling production and
Earnings per share came in at $2.36, below the Zacks Consensus
Estimate of $2.53 and deteriorated considerably from the year-ago
adjusted profit of $3.18 per share.
The integrated supermajor's quarterly revenue decreased 6.3% year
over year to $53,265.0 million and was way below the Zacks
Consensus Estimate of $66,446.0 million.
Chevron's total production of crude oil and natural gas decreased
by 2.2% from the year-earlier level to 2,588 thousand
oil-equivalent barrels per day (MBOE/d). Contribution from
project ramp-ups in the U.S., Angola and Nigeria were more than
negated by normal field declines and weather-related downtime
issues in Kazakhstan.
The U.S. output dipped 3.6% year over year, while Chevron's
international operations (accounting for 75% of the total)
registered a 1.7% fall in volumes.
Losses on the production front were accompanied by lower liquids
prices and skyrocketing exploration expenses, the net effect
resulting in a 27.2% year-over-year decline in upstream earnings
to $4,307.0 million.
However, despite the lower volumes for the quarter under
consideration, Chevron's production outlook remains one of the
most robust in its peer group, with a number of major initiatives
scheduled to come online during the next few years. Major
start-ups during the last few months include the liquefied
natural gas (LNG) project in Angola, deepwater Usan project in
Nigeria, Caesar/Tonga project in the deepwater Gulf of Mexico,
and the Chirag development in the Caspian Sea.
Amongst the major upcoming projects, Chevron's Gorgon and
Wheatstone natural gas initiatives in Australia are progressing
well, while the Jack/St. Malo and Big Foot initiatives in the
deepwater Gulf of Mexico remain on track for late 2014 and
mid-2015 start-up, respectively.
Chevron's downstream segment achieved earnings of $710.0 million,
slightly higher than the profit of $701.0 million last year. The
results were positively influenced by improved profitability from
U.S. on the back of higher refined product sales margins, lower
operating expenses and lower turnaround activities.
However, decreased earnings from the international business
dragged down the overall results to a large extent. Ex-U.S.
profits were hampered by lower refinery margins and planned
maintenance at the Star Petroleum Refining Company in Thailand.
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Capital Expenditure, Balance Sheet & Share
The second-largest U.S. oil company by market value after
Exxon Mobil Corp.
) spent $9,431.0 million in capital expenditures during the
quarter. Approximately 93% of the total outlays pertained to
As of Mar 31, 2014, the San Ramon, CA-based company had $15,612.0
million in cash and total debt of $23,054.0 million, with a
debt-to-total capitalization ratio of about 13.3%. As part of the
stock repurchase program, Chevron repurchased $1,250.0 million
worth of shares in the first quarter.
Recently, the company announced an 7.0% increase in its quarterly
dividend to $1.07 per share, or $4.28 per share annualized. The
dividend is payable on Jun 10 to shareholders of record on May
Chevron - which signed an accord last month with Argentina's
) to invest $1.6 billion in the South American country -
currently carries a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. equity market
over the next one to three months. A better-ranked stock in the
integrated energy space would be Brazil-based
), which hold a Zacks Rank #2 (Buy).